Apple in talks to buy Renesas, the world’s largest manufacturer of microcontrollers

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Apple likes to control as much of the development and supply chain as it can when it comes to smartphones and tablets. So when it sees an opportunity to grab even greater control, the company raids its very healthy stockpile of cash and does so.

That’s the case right now with Japanese company Renesas Electronics. Renesas is the world’s largest manufacturer of microcontrollers, but Apple’s interest mainly relates to the company’s production of LCD drivers and controllers. It’s these components that determine the overall quality of a display. The better they are the better the display looks, but their efficiency is also key as they account for around 10 percent of the battery use in mobile devices.

Renesas Electronics apparently needs cash to cover losses, so Apple has spotted an opportunity to take control. It is offering around $479 million for Renesas’ 55 percent stake in the company. The rest is owned by Sharp (25 percent) and Powerchip (20 percent). If the deal goes through, it is thought Apple would also go on to buy out those two companies.

The acquisition makes sense for Apple. The price is thought to be low for a company that is struggling with growing debt, but at the same time it is a company with a lot of experience that would now be focused solely on Apple’s own products. It’s also key to point out that Apple already sources all of its LCD chips from the company, so this becomes a cost saver as well. Renesas also produces Flash and SRAM, which is obviously going to be useful to Apple.

If the deal goes through the 240 employees located in Japan are expected to keep their jobs. Apple wants everything to run as normal, but will surely slowly refocus the talent on to Apple products. It may continue to offer some Renesas products to other companies, but I doubt you’ll see any smartphone or tablet components shipping to competitors.